|Court:||United States District Court for the Southern District of New York|
|Class Period:||09/10/2021 - 01/24/2022|
|Case Leader:||Jeremy P. Robinson|
|Case Team:||William E. Freeland|
On January 24, 2022, a class action lawsuit was filed in the U.S. District Court for the Southern District of New York alleging violations of the federal securities laws against Bumble Inc., (“Bumble” or the “Company”), certain of the Company’s senior executives and directors, controlling shareholder Blackstone Inc., Blackstone CEO Stephen Schwarzman, and several underwriters (collectively, “Defendants”). The lawsuit was brought on behalf of investors in Bumble that purchased Bumble stock in the Secondary Public Offering (“SPO”) conducted on September 10, 2021.
Throughout the Class Period, Defendants made materially false and misleading statements and omissions regarding Bumble’s business and financial performance. Specifically, the Company made representations about growth in paying users across its two primary dating apps, the Bumble App and the Badoo App. As Bumble launched a secondary offering, investors relied on statements in the Company’s registration statement concerning growth in paying users, including that it observed an “increasing propensity for users to pay,” that it “expect[ed] to increase paying users,” and that its community was “growing.” Bumble also made statements that treated as hypothetical the risk of slowing or declining paying user growth—a risk that, in fact, was transpiring throughout that quarter and as Bumble conducted the offering. And Bumble omitted from the offering documents any disclosures about the decline in paying users. These statements and omissions, and the negligently prepared SPO offering documents, were facilitated by Bumble executives and directors, as well as the SPO underwriters.
All of this transpired in the context of Bumble being a company controlled by its founder, CEO Whitney Wolfe Herd, and the private equity behemoth Blackstone, which had sweeping rights to appoint directors to the Company’s Board, to receive detailed, sensitive, non-public information, and, crucially, to require Bumble to offer securities to the public in the SPO at issue in this litigation.
The truth emerged on November 10, 2021, when Bumble disclosed that it was suffering from an overall decrease in paying users, driven by a precipitous decrease in paying users on its Badoo App and slowing growth in paying users on its Bumble App. Rather than an “increasing propensity for users to pay,” Bumble was experiencing, in the words of one analyst, “lagging propensity to pay.” In response to this disclosure, Bumble’s stock price dropped 19.25%, or $9.19 per share. The next day, Bumble’s stock dropped by another 5.21% on November 12, 2021.
On August 25, 2022, the Court appointed Louisiana Sheriffs’ Pension & Relief Fund lead plaintiff, and approved BLB&G as lead counsel. Lead Plaintiff filed an Consolidated Amended Class Action Complaint on October 7, 2022. Defendants Motion to Dismiss will be filed by November 18, 2022. The case is before Judge Denise Cote.
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